SHAH ALAM: After waiting for some 29 months and three governments, the LCS project has finally been approved for resumption of work, Defence Minister DS Hishammuddin Hussein said yesterday. In a release issued on April 21, Hishammuddin said the Cabinet at its meeting that day has approved the resumption of the project.
However, it will take some six months for the project to be restarted as there were still various negotiations to be completed, first. So if we are lucky actual work at the yard will start this October or November. From the release it is likely all six LCS will be completed though it was not stated expressly.
As expected, Hishammuddin did not state any financial cost of the project apart from saying that the vendors of the project have financial commitments of RM4 billion. As the government already has paid some RM6.1 billion for the project, we can assumed that the RM9.1 billion ceiling price will be breached. As I stated earlier, the estimates for the project cost – if it was started in January 2022 – was RM14 billion.
Why is the estimates to restart the project important? The previous defence minister had already told the government will not pay more than the ceiling price (RM9.1 billion) though he did not say who will pay for the higher costs. I am told that Boustead Heavy Engineering Corporation (BHIC) – the parent company of BNS – will pay for the the costs overrun (some RM5 billion) by issuing an Islamic sukuk (bonds).
How will they for pay for it then? By building the LMS Batch II of course and other ships for the RMN! Will this be the government’s line, I have no idea. Technically as the Boustead group of companies are owned by LTAT, it is the taxpayers who will be ultimately paying for it.
The release from Hishammuddin:
STATUS TERKINI LCS: KABINET SEBULAT SUARA LULUS PROJEK PEROLEHAN
LCS DITERUSKAN
1. Dalam usaha menyelesaikan isu perolehan kapal Littoral Combat Ship (LCS), ia satu
perjalanan yang panjang dan mencabar. Sesi PAC mengenai LCS telah diadakan
sebanyak 10 kali di mana saya sendiri dipanggil menghadap PAC pada 25 Januari
lalu selain telah menjawab soalan tentang LCS di Dewan Rakyat sebanyak 10 kali.
2. Selain itu, mendapatkan konsensus dan kerjasama semua pihak berkepentingan dalam
Jawatankuasa Khas Kabinet yang dipengerusikan Menteri di Jabatan Perdana
Menteri, YB Dato’ Seri Mustapha Mohamed termasuk Kementerian Pertahanan,
Kementerian Kewangan, Tentera Laut Diraja Malaysia (TLDM), Lembaga Tabung
Angkatan Tentera (LTAT), Boustead Naval Shipyard (BNS), Implementation
Coordination Unit (ICU), Economic Planning Unit (EPU) dan Jabatan Peguam Negara
juga merupakan salah satu usaha yang amat penting.
3. Sesi lawatan tapak di Lumut, Perak pula telah diadakan sebanyak 9 kali oleh
stakeholders utama – 2 kali oleh Menteri Pertahanan sebelum ini (YAB Dato’ Sri Ismail
Sabri dan YB Mohamad Sabu), sekali oleh Jawatankuasa Khas Kabinet, sekali oleh
Menteri Pembangunan Usahawan dan Koperasi, sekali oleh Jawatankuasa Kira-Kira
Wang Negara (PAC) dan 4 kali oleh LTAT, Ketua Setiausaha (KSU) serta Timbalan
KSU.
4. Alhamdulillah, selepas segala usaha dan pendekatan ini, hari ini menerusi Mesyuarat
Jemaah Menteri yang dipengerusikan YAB Perdana Menteri, Kabinet sebulat suara
memuktamadkan supaya projek perolehan LCS diteruskan.
5. Keputusan ini dibuat Kabinet setelah mengambil kira dua faktor utama:-
i. Pertama, LCS sememangnya aset yang amat dimahukan dan diperlukan
oleh TLDM. Bukan sahaja untuk memenuhi perancangan pemodenan TLDM di
bawah Transformasi 15 to 5, malah lebih penting untuk meningkatkan
kesiapsiagaan pasukan armada kita serta menambahbaik usaha memelihara
kepentingan maritim negara. Saya percaya keputusan hari ini dapat
meningkatkan lagi moral dan semangat anggota TLDM untuk terus berjuang
demi kedaulatan tanah air.
ii. Kedua, terdapat 400 vendor yang terlibat dalam projek ini dengan implikasi
kewangan lebih RM4 billion. Daripada jumlah ini:
• Lebih 100 daripadanya adalah syarikat milik rakyat Malaysia. 90% daripadanya ada hubung kait dengan veteran.
• Majoriti mereka berada di Lumut terutama pekerja berkemahiran/pakar/ahli keluarga mereka.6. Jadi, keputusan ini juga merupakan sebahagian daripada usaha membela kebajikan
veteran ATM, isteri, anak serta ahli keluarga mereka. Saya ambil maklum, vendorvendor ini mengikuti rapat perkembangan usaha menyelesaikan isu LCS ini dan mereka
pastinya gembira dengan keputusan ini.
7. Dengan keputusan ini, tiada lagi persoalan sama ada perolehan LCS akan diteruskan
ataupun tidak. Kini, semua pihak yang berkepentingan boleh bergerak ke hadapan dan
fokus untuk menjayakannya.
8. Paling penting, setiap mekanisma penambahbaikan yang dicadangkan khususnya oleh
Jawatankuasa Khas Kabinet harus dilaksanakan sebaik mungkin supaya perancangan
dan garis masa yang ditetapkan kali ini dapat ditepati sepenuhnya.
9. Komitmen lebih besar ialah memastikan segala isu ketirisan sebelum ini tidak berulang.
Semua pihak yang terlibat kali ini khususnya BNS yang sedang diterajui pengurusan
baru mesti memainkan peranan masing-masing dengan telus dan bertanggungjawab.
10. Kelulusan Kabinet ini hanyalah peringkat permulaan yang baik. Namun, terdapat
beberapa lagi langkah ke hadapan untuk melangkapkan Pelan Pemulihan antaranya
“Proses Mobilisasi” dalam tempoh 6 bulan mendatang. Ini akan melibatkan rundingan
antara bank, vendor dan pihak OEM. Tidak terkecuali, rundingan dengan pihak Perancis
daripada segi reka bentuk dan komitmen Kerajaan Perancis. Ini semua bermula
sekarang.
11. Dalam masa yang sama, agensi-agensi lain yang berkaitan termasuk SPRM juga digesa
untuk mempercepatkan peranan masing-masing bagi memastikan setiap proses yang
perlu dilalui berjalan lancar.
12. Kabinet akan menubuhkan sebuah Jawatankuasa Tadbir Urus Khas yang bakal
dipengerusikan oleh Ketua Setiausaha Perbendaharaan Kementerian Kewangan
serta KSU Kementerian Pertahanan. Jawatankuasa ini ditugaskan memantau secara
dekat terutama proses dalam tempoh 6 bulan mendatang dan melaporkan
perkembangannya kepada Kabinet pada setiap bulan.
13. Saya juga ingin tegaskan, keputusan meneruskan projek LCS tidak bermakna pihak
yang terlibat salah laku dalam projek sebelum ini akan terlepas begitu sahaja.
SPRM telah menahan reman dua CEO sebelum ini dan SPRM juga digesa untuk
percepatkan siasatan. Siapa jua yang bersalah pasti akan dihadapkan ke muka
pengadilan.
14. Perincian lebih lanjut tentang bagaimana projek ini akan diteruskan akan dimaklumkan
dari masa ke masa
— Malaysian Defence
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View Comments (34)
Good. This mean all 6 LCS will be completed. All this 6 LCS together with 8 LMS Batch II that evolved to the corvette at least makes RMN/TLDM has better major surface combatants (frigate & corvette) then before. I also believed Lekiu-class frigate will also received upgrade in the future to augment the fleet. (I hope)
If the decision is to complete all 6 Gowinds whatever the cost is, then there is virtually no need for LMS Batch 2 to be buit to the revised specification. With this, how would be the project timeline? Can we see the lead ship completed in 12 months? Will there be money to buy the VL MICA that was designed for the ship?
So need to reboot (for the upteenth time) the LMS to become a multi-purpose ship again. With much lower price than the chinese built LMS to offset the cost to complete the LCS Gowind.
Still the biggest elephant in the room is, where will the money actually be coming from?
So it seems that it is not from the government budget. If they do the BNS sukuk, basically it will be the retired servicemen that will be paying for all the mistakes (through LTAT).
BNS will continue putting out mediocre but super expensive ships to cover the sukuk.
Still need to see how does RMN plan now with this new decision. 15 to 5 is dead. There is no need for RMN to have 18 PVs. With 6 Gowinds to be completed, RMN could be shaped into
6x Gowinds (by 2030)
4x Large Frigates 2031-2040 to replace lekiu and kasturi
4x Scorpenes (hopefully by 2030)
24x LMS batch 2 (2026-2035) that is cheaper (target half the price) than of the batch 1. 50-60m only. With multi purpose deck. Having same speed (28 knots) and range (5000nm at 15 knots) as Gowinds.
My summary:
1. LCS will restart, Yay! But no mention on the costing, Boo! Basically this is an GE15 focused announcement, to make those involved happy while not raising ire of the wider rakyat by telling how much more it would cost taxpayers. In between the 6 months, we can expect a GE so this news is just to make people happy without spending money yet.
2. It has turn into a weird cycle, the LCS used to bail out Kedahs and in turn the LMS Batch 2(likely will be new Kedahs) used to bail out LCS. I foresee if we did not budget sufficient extra funding, this new LMS builds will also suffer the same fate.
3. There will be a Cabinet committee to oversee the rest of the progress, hopefully with regular transparent reporting to the Cabinet.
4. "rundingan dengan pihak Perancis daripada segi reka bentuk dan komitmen Kerajaan Perancis" What does that means? BNS still not managed to solve their design problem and needing NAVAL help now? And what does French Govt has to do with it? Funny.
Nope the Lekius are done as the Kasturis as foreseen by the 15 to 5 plan. When is the million dollar question
Whats the news on the MMEA Tun Fatimah class OPV?
By August I am told, if all goes well
gonggok - ''Still need to see how does RMN plan now with this new decision. 15 to 5 is dead. There is no need for RMN to have 18 PVs.''
It died a natural death years ago as I kept pointing out. Inevitable given that it was a product of its time; driven by prevailing political and other factors; factors beyond the RMN's control - the first nail in the coffin was the 4 Chinese built LMSs.
There is indeed no need for the RMN to have follow on fully fitted out Kedahs [not to perform as ''PVS' or 'OPVs' as per the original plan] if LMS Batch 2s are funded on time and per spec. As it stands even though follow on Kedahs were included in the 15/15; little likelihood of any been actually ordered. The question is whether any existing programmes or ones already approved will be scaled back.
Rock - ''RMN/TLDM has better major surface combatants (frigate & corvette) then before.''
That was always the plan. Years ago the plan was to have 6 Lekius backed by FACs and Laksamanas but as time passed this plan evolved. I wouldn't be so quick to apply the ''better'' term however as it really remains to be seen how future surface platforms are fitted out and the level of integration.
This restarting require much support and commitment with the Main Contractor (Where Ex-Services also here) ,Design Authority and RMN Project Team, in ensuring no more unrealistic changes and addition were made (even small changes but many and affecting design) that make this so call \"Prototype Ship\" could not deliver at all due to additional time required and cost overruns. But, changes of obsolete equipment is expected and to be done carefully, according to performance required and volume available. (We are the 1st country using Gowind Class Design, but Egypt Navy got it operational 1st). Hope for the best for our Nation and Navy.
None so far
So basically its, we will restart. But construction will only restart after 6 months. There is a lot of issues to resolve but we don't really have a full picture of the issues therefore don't have all the answers and solutions. We have a dollar amount we need to pay but we don't know how much the entire project will eventually cost. We have a plan, to set up a committee to develop a plan, which includes a plan to make sure things will not repeat, and a plan to make sure the ships are completed, and maybe another plan to plan how we plan to find and prosecute the wrongdoers. So basically, what we have is a media statement with a plan to restart the program, which first require plans to create many different plans in order to make sure any plans we decide to execute will be done according to the plan. But first let us taichi to a new committee which will be led by the Ministry of Finance, and wait for the Ministry of Finance to develop their own plan and tell us what plan the Ministry of Defence should follow when Mindef develop's their own plan. How convenient for the Minister of Defence.
Joe - "rundingan dengan pihak Perancis daripada segi reka bentuk dan komitmen Kerajaan Perancis” What does that means"
Something to do with the french pride i assume?. Some time ago naval news run a sensationalized story about UAE gowind as the 1st french design ship not to be equipped with french missiles.
Joe - "It has turn into a weird cycle, the LCS used to bail out Kedahs and in turn the LMS Batch 2(likely will be new Kedahs) used to bail out LCS. I foresee if we did not budget sufficient extra funding, this new LMS builds will also suffer the same fate"
We achieve bailoutception 🤭
Personally i do think Petronas which extract huge somes of $$$ in SCS which owned a pretty successful yard with commercial customer & plenty of expertise & $$$ would eventually be called to chip in to complete the bailoutception as like when baustead are called to perform the national service of bailing out the Kedah.
As for the LMS2 being the new Kedah. IMHO not that true. Under the original 15to5 most of their current fleet to be replaced by LMS & NGPC. But under the current navy chief, seems the LMS & NGPC is merge into 1.
So LMS2 would actually be replacing all of their current fleet be it the Kedah,Lekiu,kasturi,perdana,laksamana or Mahameru in a single hull. Trading quantity for quality.
as per DWP
"Bagi operasi maritim di dalam kawasan teras, ATM akan mengaturgerak Kapal Misi
Pesisir (Littoral Mission Ship, LMS) yang boleh menjalankan pelbagai misi termasuk SAR dan HADR, antikeganasan dan antipelanunan, pengumpulan risikan dan peninjauan, hidrografi dan antiperiuk api. LMS adalah reka bentuk modular dan boleh dilengkapi dengan senjata dan sistem tambahan untuk memenuhi keperluan operasi masa hadapan"
"ZMM sangat luas meliputi ZEE, pelantar benua dan ruang udara di atasnya. Keupayaan udara dan maritim diperlukan untuk meningkatkan MDA untuk memberi gambaran operasi yang lebih baik di kawasan lanjutan. ATM perlu mencapai Kawalan Laut (Sea Control) di permukaan dan bawah permukaan melalui Penafian Laut (Sea Denial) dan Penegasan Laut (Sea Assertion). Justeru, ATM bergantung pada dua kelas kapal perang iaitu Kapal Tempur Pesisir (Littoral Combat Ship, LCS) dan Kapal Ronda Generasi Baru (New Generation Patrol Vessel, NGPV) yang mampu melaksanakan operasi di kawasan ini dengan jarak, ketahanan dan keupayaan yang diperlukan".